How Can I Help with the Grandchildren?
There is something very special about becoming a Grandparent, which often evokes pride and a drive to be a part of your grandchild’s life. There are many ways that grandparents can help support the healthy, emotional and financial development of their grandchildren and even more so when you are retired.
How can I help out practically?
- Taking care of them and giving parents a break! You might remember how exhausting it was being a parent and how tricky the balance can be for work, social life and the need to rest. Precious time with your grandchildren can be a win-win situation as it can help your adult children get precious time to work, run errands or rest! It will also increase your grandchild’s attachment to you by giving you time to connect with them. This can be one way of using your newly found free time in retirement. They could come and visit you at your retirement village in the school holidays and you can enjoy all we have to offer with them, whilst helping their parents out.
- Giving advice and supporting your adult children – Navigating parenting can be a minefield and there is so much advice out there. Offering your own experience and advice can be really supportive. Even if you don’t have all the answers, just offering an empathetic ear can make all the difference and mean your children are not worrying about parenting struggles alone.
- Telling family stories – Children love to hear stories, and stories about their own family in particular. They might want to learn about how their parents grew up, relatives they have never met and any tough or exciting times the family has been through. Grandparents often have treasured stories and photos to share, and these give your grandchildren a sense of belonging and helps them to see where they fit in your family’s history.
- Share your wisdom – As one of the elders in the family you have a wealth of experience that you can share and become a trusted resource of advice for them. As they get older, they may not directly ask for advice or help, but will certainly benefit from thoughtful coaching and guidance to help them make decisions.
- Allow them to teach you! – As you get older you are often less in touch with modern life and technology. Our grandchildren are digital natives and there is a lot you can learn from them, and in turn allowing them to teach you helps to build their confidence and self-esteem.
How can I support financially?
For many of us, gifting money to our children and grandchildren and helping them on the path of financial security is an important part of our long-term retirement and financial plan. If you as grandparents have the means to help, it can go a long way in offsetting many costs and help to release some of the financial strain of parenting, especially in the current times. It is best to enlist the help of a financial planner to help you work out the best options for your specific financial circumstances, but we have listed some options below to think about:
- Junior ISA – Setting up a Junior Individual Savings Account (JISA) is a popular option and there are two types, cash or stocks and shares. The main advantage is that any growth is tax-free in a similar way to an adult ISA, and once one is opened by a parent or guardian, anyone can contribute within the limit of £9,000 each tax year. Contributions are locked away until the child’s 18th birthday, when it will then be converted into an adult ISA and they will gain full control of the funds.
- Pension – There is no minimum age for setting up a pension for a child and when they have no earnings it is possible to contribute up to £2,880 per year on their behalf, with you receiving additional tax relief from the government which will be added to the pension pot. The child won’t be able to access these funds for decades, so they won’t help with early life events but there is less worry about the funds being accessible when they child isn’t mature enough to manage them, and they will help with later life events.
- Support with school fees or university costs – If you can afford to, you could make regular payments to help your grandchildren cover costs of school or university, and depending on the circumstances, this may also mean the cash is considered to be out of your estate for inheritance tax purposes.
- Help them to get on the property ladder – You could help encourage saving habits and match what they save, and help with a deposit for a property. One way to boost the cash you might give them for a property deposit is giving them up to $4,000 a year from the age of 18, and for them to put into a lifetime ISA. The government will add a bonus 25% on top of this and super-charge your gift.
- Consider leaving them a lump sum in your will – Chances are you have already thought about your will, and this will have been considered. But if not, consider leaning them a lump sum which may give them a real chance of getting onto the housing ladder or give them and their own family a good start in life.
Being a grandparent really is a unique and wonderful experience, one that you can really enjoy once you are retired by spending quality time with your grandchildren. By being as involved as possible and supporting them financially in your retirement you will have a huge impact on their lives.
Speaking to a financial planner will help you to make a clear decision appropriate to your family’s needs and situation. The information here is based on our understanding in April 2023 and should not be taken as financial advice.